So recently I’ve found myself saying this line to friends & family, “I must be the only person who pays their bills on time. My tenants don’t pay on time. My clients don’t pay on time. So I must be the only one.”

I have the idea that if it was easier for tenants to pay the rent, maybe they would at least try to pay on time. At this point, most of my tenants do pay on time but I’m shooting for 100%.

I’m attempting to enable tenants to pay via our web site with a bank draft type mechanism. Amazingly, all of the tenants have broadband internet access now. While this will take away from my bottom-line, hopefully rent will come in faster.

I’ve heard from some landlords that set up automatic payment plans for their tenants that they vary the payment amounts by 1 cent so that each tenant pays a marginally different amount. That way, when they look at their bank statement, it’s easy to tell who has paid rent and who hasn’t (due to insufficient funds or something else that would cause the automatic payment to fail). You might also consider offering a slight discount on rent to people who pay this way.

I send my tenants directly to the bank every month. With a one-year lease I hand them a book of coupons and instruct them to make a deposit directly to a bank account that I’ve established specifically for that purpose.

I use Bank of America ’cause there’s one on every corner here in Houston. And I have the address and/or unit written on each slip. When I check online from the comfort of my home computer I can see the scanned slips w/ each deposit, I know who has paid and who hasn’t, and with a mouse click I move the funds into my “real” account….so that the account that the tenants have the number to remains at a zero balance.

Please report back what you find out. I would love for my tenants to pay electronically. I did some preliminary research but found services that wanted to charge between 5 and 8%. That type of sacrifice is too much for me to handle.

I have 80 units and thought that the autopayment option would offer a convenient method of pmt for my tenants. So far a few of the more progressive ones are taking advantage of it but the majority are “old school” and are somewhat leery of internet security and privacy issues. I will keep trying.

I have one account set up for each property (accounts are free after all). On the Bank’s website I give the account a ‘nickname’ that is the same as the property’s address (ex. “123 Anystreet”). The lease has the account number and the tenant has to deposit the rent into the account.

Once the rent is paid, it automatically (through scheduled transfers) transfers to my Operating account.

I wrote an article (Automate Your Rent Collection) about this technique: